We often hear questions about interest rates in the foreign exchange market. In addition to the Fed funds rate cut by the Federal Reserve, the rediscount rate, etc., there are also some important interest rates that are relatively unfamiliar to everyone, such as the London Interbank Offered Rate, or libor for short. LIBOR refers to the interest rate at which a first-class bank in London borrows money from another first-class bank in London. Now LIBOR has been used as the basic interest rate of most floating interest rates in the international financial market, as the financing cost for banks to raise funds from the market for on-lending. The LIBOR negotiated in the loan agreement is generally determined by several designated reference banks. (usually 11:00 am London time) the average rate quoted. The most heavily used are 3 and 6 months of LIBOR. my country’s external financing cost is based on the LIBOR interest rate plus a certain percentage point. Changes from LIBOR include Singapore Interbank Offered Rate (SIBOR), New York Interbank Offered Rate (NIBOR), Hong Kong Interbank Offered Rate (HIBOR) and so on.
Interbank Offered Rate refers to the short-term capital lending rate between banks.
There are two interest rates for interbank lending, the bid rate indicates the interest rate at which the bank is willing to borrow;
Offereddrate is the rate at which banks are willing to lend. A bank’s lending (borrowing) is actually another bank’s lending (loaning).
Comparing the lending and lending rates of the same bank, the lending rate (bidrate) is always smaller than the lending rate (offereddrate), and the difference is the bank’s benefit.
In the U.S. market, the bid rate usually comes first, and the offer rate comes after, such as 3.25 to 3.50. In the UK market, the offered rate is generally in the front, and the bid rate is in the back, such as 3.50 to 3.25. In both states, it is expressed as “I borrowed 3.25. I loaned 3.50”.
related data
LIBOR is the cost and interest rate of short-term funds borrowing and lending between British banks. The British Banker’s Association (British Banker’s Association) according to a group of banks selected by it, the interbank offered rate quoted in the London money market, Then, the average index interest rate is calculated in the way of sample book. This pointer rate may be different every banking day. The libor rates in recent years are as follows:
1 Year LIBOR（%）　
The calculation method of LIBOR interest is: I=PRA/D
in:
I is the lending interest;
P is the loan amount;
R is the lending rate;
A is the number of days to borrow;
D is the base number of days in 1 year.